we have picked ourselves up. we have fought our way back. and we know in our hearts that for the united states of america, the best is yet to come. >> welcome back. this is a special edition of "your money, your vote." i'm kelly evans. >> i'm ross westgate. these are the headlines. >> president obama rolls to re-election and a second term, defeating mitt romney despite a weak u.s. economy and persistently high unemployment. >> investors cheer obama's re-election.

equities trading high led by autos and health care stocks. >> democrats keep their hold of the senate and republicans keep their control of the house. >> there will be a tough challenge facing the looming fiscal cliff. a very good morning to you. it's been a long night, but we have a result. >> yes, we do. let's get right it to. president barack obama capturing a second term in the white house despite the struggling u.s. economy. he did manage to win many of the same states he took in 2008 and nearly all the critical swing states, including ohio, virginia, and colorado. speaking to supporters in chicago just a few hours ago, the president congratulated his republican challenger on the spirited race and said there's plenty of work ahead to fix the

country's fiscal problems. >> i believe we can seize this future together, because we are not as divided as our politics suggest. we're not as cynical as the pundits believe. we are greater than the sum of our individual ambitions, and we remain more than a collection of red states and blue states. we are and forever will be the united states of america. >> romney made his concession speech before his supporters in boston. the loss ends a six-year quest for the presidency for the former massachusetts governor. he lost the republican nomination to john mccain in 2008. romney wished president obama well, but also noted the deep divide amongst the parties in washington and urged leaders to work together. >> the nation as you know is at a critical point. at a time like this, we can't risk partisan bickering and political posturing. our lead verse to reach across the aisle to do the people's

work. >> while the electoral college makes this win look far more decisive than the popular vote, that is just one of the quirks of the u.s. electoral voting system that many people worldwide have been learning about. 303, the number of delegates that he has to romney's 206. despite the very close popular vote, again, the electoral college votes make it much more decisive. florida remains a toss-up. clearly not going to make a difference to the overall outcome. 270, that was the number to reesm we knew once we started to get the results from ohio, that it was going in barack obama's way decisively. yes, 303 to barack obama 206 to mitt romney. >> but the race for the white house wasn't the only major contest as control of congress was also up for grabs. the democrats held on to the senate picking up two additional seats in massachusetts, where elizabeth warren beat the

incumbent scott brown. in indiana, congressman joe donnelly beat the controversial richard mourdock. congress remains divides republicans maintain their control over the house of representatives. romney's running mate paul ryan won his re-election campaign for his house seat. >> joining us for more analysis is ron freeman. ron, good morning. >> good morning, kelly. >> ron, what's your initial reaction here to the outcome? what's the biggest impact this is going to have on policy? >> i think the biggest impact it will have on policy is we have a president we know well. we know what his policies are. we know what he's tried to do. the real question is whether the congress will see that the negation approach has not worked for them and they need now to come together to a grand bargain as they face the imminent fiscal cliff, even during the lame duck

congress. >> i thought for at least this morning we could put the uncertainty question out of our minds. haven't all of our problems been solved? shouldn't we know that everyone's going to come together in the bipartisan spirit they're so espousing in these speeches overnight? >> kelly, as always, you ask just the right question. as we know, governor romney was obliged because of the current nature of the republican party to run a very cynical campaign, starting as a conservative rian then moving to moderate. they will not insist on a candidate whose views keep shifting. >> the popular vote was close, although the electoral vote is decisive, there's still a sense that people voted not with the conviction that they maybe had in 2008. where does this leave president obama when he now has to come

forward and negotiate, for example, an outcome to avoid the fiscal cliff? >> well, it leaves him confronting a speaker of the house john boehner who i hope will be able to exert this time a bit more control over his republican constituency. they have got to work together. otherwise, president obama will be obliged to use the fiscal cliff as a weapon, blaming the republicans for perhaps crippling the economy again as these new taxes kick in and as across the board thoughtless spending cuts come into effect. that would be bad for the country and bad for the start for the new administration. there needs to be cooperation between the two sides of the aisle. i hope we have a chance to have that now. >> the president presumably, as he's just won a second term, he could argue look, i have the right plan and put the onus squarely on the republican party to get behind it. >> theoretically, he should be able to do that, and he's luckier than any of his

predecessors that had a major term because he's not dealing with a watergate, not a monica lewinsky, not a vietnam war. he's dealing with the problem that was there since he's been elected, the economic recovery, which needs help and negotiation. >> with all the focus internationally -- you're joining us from paris today. what important policy issues is its crowding out? where should our focus be at the moment? >> well, of course it's crowding out the issue of how we deal with our friends in europe who are suffering terrible economic pressure. europe is in a drought of no growth, of high unemployment and of real concern about what they do about the eurozone, whether the eurozone itself will continue to hold together and be the right solution. this is an issue -- >> i was just going to say what is america's role here? why is this issue, what's happening in europe, something that should be more significant

overseas? >> we're major trading partners with each other. europe is a source of american culture. source of america's most faithful allies. we cannot turn our back on europe and i don't think president obama has any attention of doing so. >> ron freeman, thank you very much for your time this morning. >> thank you, kelly. plenty to get through. if you have any thoughts, you can e-mail us. as far as futures are concerned this morning -- >> still pretty decisive. >> they started down and they've perked up. >> is that the case that we initially were weaker overnight? >> s&p gone down to 1411. >> we're at 1430 now? >> exactly. we'll get all the reaction in a few moments time. we'll also head out to chicago for coverage from obama's headquarters where jubilant crowds continue to celebrate obama's second term.

i look forward to reaching out and working with members of both parties to reduce our deficit, reforming our tax code, fixing our immigration system, freeing ourselves from foreign oil. we've got more work to do.

>> a rousing acceptance speech from the re-elected president obama. tracy potts joins us from outside his headquarters in chicago. tracy, what kind of evening has it been there? >> you know, watching that speech last night, it was difficult to believe that just a few weeks ago in the first debate, we were talking about a president with no energy, because what we heard here on this stage last night was reminiscent of his speech in 2008. a lot of energy. the tone of that speech, unity among americans. he talked about what had become a deeply divided campaign over the last couple of years, saying that we were both candidates fighting for a country that we believed in, and that we, americans, are not as divided as the pundits seem to think. the numbers don't seem to bear that out, because even though the president won this race, he won it with just over half of this country, meaning almost half of this country voted for

governor mitt romney. he talked about governor romney in this speech, saying that his family, not just governor romney, but his father governor romney and his grandfather should be applauded for a life of public service. he said he wanted to sit down and talk about how they could bring the two sides of this nation together and talk about how they could really make things change in washington. it was a speech of vision, and now he heads back to washington later this afternoon for the difficult work of governing the nation. >> tracy, thank you. >> i wonder if tracy has had any sleep tonight. we saw her 24 hours ago in ohio. all of these reporters are -- >> doing a good job. >> they're barely getting any rest at all. the mood was certainly different over at romney headquarters in boston as romney gave his concession speech to supporters. despite rumors, romney accepted defeat, reminding the country that it must remain unified.

>> the nation, as you know, is at a critical point. at a time like this, we can't risk partisan bickering and political posturing. our leaders have to reach across the aisle to do the people's work. >> joining us now is danielle leigh from romney headquarters in boston, where i imagine you've been up all night. it looks pretty empty behind you. were people pretty quick to file out once the results were in? >> kelly, it was a pretty quick emptying out of this ballroom just about as soon as mitt romney finished his speech, people began leaving. all of that excitement that we had seen earlier in the evening completely fizzled out as the life was really sucked out of this party and people filed out in quiet disappointment. you heard mitt romney speaking about what needs to happen moving forward and leaders really working together that. is something that supporters here say they are really hoping to see, they are hoping that leaders in congress can come together and try to find some solutions to some of the problems that we've been facing, specifically that looming fiscal cliff. they say they were not entirely surprised, but they are still

disappointed, and mitt romney congratulating president obama but also expressing his disappointment as well. reporting live in boston, i'm danielle leigh, back to you. >> thanks very much. >> and just a reminder, the headlines today, president obama wins a second term and vows to tackle the key challenges ahead, the fiscal cliff at the top of that list. equities and european trade higher with gold also extending gains. but the prospect of gridlock in washington remains as the democrats retain the senate and republicans the house. that's the results. how are markets reacting? >> all that matters, as we know, is what we're seeing on the board behind me. you mentioned earlier that markets started off a bit mixed, but what we are seeing now is green across the board. the s&p 500 has come off a little bit from that level. 1427. trying to add four or five

points here at the open. the dow jones is looking to add about 30 points. 13,211 is the level to watch there. strategists, whether in the city or on wall street, have been talking about how in close elections, once we know the outcome, markets typically do well to year end. today certainly seems consistent with that theme. it's not just a u.s. story. ftse 100 adding .3 of a percent. the ibex even perking up, adding about .6 of a percent this morning. >> the fed is not changing its policy any time soon, right? so that qe is still in play. that's the knee jerk reaction. also played out as far as bund markets. bund yields just a little bit high. but we're lower in spain. in italy, 4.9.

really important that they're going to get bailout money. maybe there's a few that will go through. ten-year treasury yields, 1.69% is where we stand. we did get down to 1.67. so as we saw initially, we saw s&p futures down, bond yields lower, those futures have gone higher. quick lock at commodities for you. and broadly speaking, the u.s. dollar index at the moment is a little bit lower. nymex slightly lower. gold slightly higher. dollar pretty much weaker across the board. euro/dollar getting up to around two-week highs at the moment. dollar steady against the yen. the aussie dollar has found commodity currencies doing better. sterling slightly firmer against the dollar as well. again, it's that qe trade which is just keeping the dollar a little bit weaker. let's recap how asia has reacted

to the election results. li sixuan has joined us from singapore. >> despite the political excitement, it's been a very subdued session, but commodities plays value and hope it will ease during obama's second term. the nikkei finished flat. analysts say obama will put more pressure on the boj. we'll bring you the coverage from beijing. the hang seng was also supported by commodity stocks. elsewhere, south korea's kospi turned higher post-election as foreign investors became net buyers. meanwhile, minors slipped support to the aussie market. lastly, index higher by .4 of a percent. >> asian leaders have also been

lining up to congratulate the re-elected president obama. china's president a day away from his country's own leadership handover acknowledged what he called positive progress. the australian prime minister and the japanese prime minister also extended best wishes to president obama for his second term. >> okay. stick around. there's still plenty more ahead on the program. it's not just about the presidential election, of course. american voters have also cast their ballot on some very devicive issues. [ female announcer ] e-trade was founded on the simple belief that bringing you better technology helps make you a better investor. with our revolutionary e-trade 360 dashboard you see exactly where your money is and what it's doing live. our e-trade pro platform offers powerful functionality that's still so usable you'll actually use it.

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we couldn't even pack it all into the program today. there's plenty more coverage worth checking out on cnbc.com. a period of soul searching is beginning for the gop. did chris christie's high praise for obama derail romney? ann coulter has weighed in. she has her view, it's worth a look. turnout at this year's election was higher than anticipated.

we've got some of the best images of democracy in action also on the website. and the obama camp spent slightly more than romney's. but can enjoy the spoils of victory, at least for tonight. romney and obama campaigns burnt through a combined total of $30 a second. $2.6 million a day. and $79 million a month during this election cycle. and a lot of that money would have flowed from wall street, but on election day, that particular district of lower manhattan is actually less important than ever. that's john carney's take. if you want to respond to that or anything else you've heard on the program, you know how. e-mail us, you can also tweet that guy. >> $79 million a month. i'm guessing that's over a two-year period? >> i guess it also works out to $400 per voter, if you assume that everyone were to turn out. so for the turnout itself, that would be an even higher tally. >> and we ended up with the status quo for all that money spent. i suppose that's one way of looking at it.

we just showed this. european stocks have a mild risk-on view today. there's a view now. of course, the fed won't be changing its policy any time. qe stays in place. a little bit less for the ftse. what about some of those u.s. stocks trading here in europe? financial stocks pretty mixed. citigroup, jp morgan, slight losses for bank america and goldman sachs, but nothing is going to change much as far as financial regulation is concerned. the stray stays the same. financial prices bake that in the cake. ubs and barclays slightly firmer. deutsche bank and hsb slightly off. so no big moves on that. pharma stocks, not a big repeal of obama's medicare. johnson & johnson is down a percent. fizer down 0.8%. energy stocks doing a little bit better across the board. shell, bp, chevron all firming

up a little bit this morning. exxon, the world's biggest oil company, down 1.2%. the status quo means fairly muted reactions as far as individual stocks and sectors that might have been impacted. the race for the white house wasn't the only major contest as control of congress was also up for grabs. democrats held on to the senate, picking up two additional seats in massachusetts. that's elizabeth warren, and in indiana. congress remains divided as republicans maintain their control over house of representatives. and there are also some historic state ballots cast. maine and maryland became the first states to approve same-sex marriage by a popular vote, while washington state and colorado legalized recreational use of marijuana. i'm trying to resist comment on that one, because it will only get me into trouble. >> maybe it will turn into amsterdam. >> this is going to spur the next tea party renaissance, which is an issue we're going to discuss. >> the next renaissance.

>> all right. >> we just lost the election. >> i mean the first time around with obama care, that was part of the ump us the as well as the bailouts for the tea party in the first place. the question now becomes facing four more years of these policies. and you say turning the u.s. into amsterdam, perhaps. still to come on "worldwide exchange," we'll look at the challenges that the re-elected president faces, most importantly the fiscal cliff. >> we'll get views from both sides of the aisle as candidates vow to bury the hatchet. >> the nation, as you know, is at a critical point. at a time like this, we can't risk partisan bickering and political posturing. our lead verse to reach across the aisle to do the people's work. and we citizens also have to rise to the occasion. >> in the weeks ahead, i also look forward to sitting down with governor romney to talk about where we can work together to move this country forward.

we have picked ourselves up. we have fought our way back. and we know in our hearts that for the united states of america, the best is yet to come.

welcome back. >> here are the headlines. >> president obama rolls to re-election in a second term, defeating mitt romney despite the weak u.s. economy and persistently high unemployment. >> investors in europe cheer obama's victory. equities trading high led by autos and some health care stocks. >> no major shift in the balance of power on capitol hill. the democrats keep their hold on the senate. republicans retain control of the house. >> but the next four years are now secure. president obama's facing a fresh challenge, tackling the u.s. budget deficit and the looming fiscal cliff. it's been a long night for everybody, but the results are clear, they're in. >> the party at the u.s. embassy over here went on into the wee

hours of night. i didn't say the whole time, but the ambassador was supposed to -- you know, it was supposed to go until 4:00 in the morning. i don't know if he managed, but there were plenty of people stumbling out there after enjoying the jack daniels, among other sponsored products. barack obama has captured a second term in the white house, again, despite the struggling u.s. economy. he managed to win many of the same states he took in 2008. nearly all of the critical swing states, including ohio, virginia, and colorado. speaking to supporters in chicago just a few hours ago, the president congratulated his republican challenger on a spirited race and said there's plenty more work ahead to fix the country's fiscal problems. >> i believe we can seize this future together. because we are not as divided as our politics suggest. we're not as cynical as the pundits believe. we are greater than the sum of our individual ambitions, and we remain more than a collection of red states and blue states. we are and forever will be the

united states of america. >> romney made his concession speech before his supporters in boston. the loss ends a six-year quest for the presidency for the former massachusetts governor. he lost the republican nomination to john mccain in 2008. romney wished president obama well, but also noted the deep divide amongst the parties in washington and urged leaders to work together. >> the nation, as you know, is at a critical point. at a time like this, we can't risk partisan bickering and political posturing. our lead verse to reach across the aisle to do the people's work. >> joining us now for more on the phone from new york is penny lee, president of ven strategies. also with us from boston is the principle at strategy international and a republican strategist, also a contributor to the daily caller. good morning to you both. i'm sure it's been a long night. penny, have you gotten any sleep yet? >> i have. i didn't know i was going to be

calling in. we were able to have some champagne. it was a phenomenal night, a boost for re-elect obama, but amazing to keep control of the senate. the map was not in the democrats' favor at all. and to protect 23 seats to the republicans' ten, it was a resounding victory in many, many key states. >> boris, why didn't mitt romney win? >> well, first of all, let me congratulate barack obama on winning re-election. mitt romney didn't win for a variety of reasons. one of them being that barack obama did run a strong campaign, as did mitt romney. but barack obama ran a strong campaign. there was a con influence of other events. there was a supreme court decision on health care, on obama care. there was the situation in the second debate with candy crowley fact checking mitt romney incorrectly.

but all in all, overall as republicans, what we have to do now is go back to the drawing board and see how we can do better next time. what can we do to broaden our base. that's what we need to do. we need to get to latino voters, to black voters. we need to bridge the gap with women. we need to do better. we can do better. and get back to that ronald reagan equation. >> where does this leave us now as we head towards discussion on the fiscal cliff? the president could quite easily claim i've just been re-elected, i have the moral and legal right to set the agenda on this and put all the emphasis on republicans to sort of back him. and blame them if a deal doesn't get done. how are they going to respond if he does that? >> where republicans did win tonight is in the house. and those are two-year terms. you could say that's really the will of the people has spoken is

in the house. it's not up to him now to blame people. it's up to him to bring folks together. and that's what he said he was going to do in the speech tonight. and hopefully that is what he is going to do. there's bipartisanship we saw between him and chris christie, that was good to see. i think it's up to president barack obama in his second term to be able to work with republicans across the aisle, something that he was not able to do in the first four years of his presidency, and get us away from the fiscal cliff. actually, i think the focus on that is more on barack obama than anyone else. >> penny, how do you think he's going to play it? >> it's going to be interesting. congress usually does best when their back sup against the wall, when they have a deadline they absolutely have to meet. and that deadline is really on the raising of the debt ceiling. we put ourselves in that pretty severe risk. the debt ceiling is coming back

again. that is the deadline that is going to force all action along with some of the expiring tax cuts. they have to come up with something, otherwise 3% to 4% of our gdp is beginning to be affected and we could end up back into a depression. so they understand the consequences. they understand the severity of what they're looking at. it's most likely that they'll come together on some type of temporary fix and work on a more permanent long-term session for the next congress. >> boris, with the outcome here, voting to legalize recreational use and marijuana, the votes in favor of gay marriage, has america here take an step to the left? is this perhaps telling us that there are areas where both sides agree, where at least both sides can agree on some issues? >> well, on social issues, i think you're seeing that in some states. there has been a movement to the left or toward a more liberal point of view. that's why i think as republicans we need to concentrate on small government, low taxes and national security.

and leave social issues to the states, because that's where they belong. and we do well as a party to concentrate on the higher overarching issues that are designed for the federal government by the u.s. constitution. so i agree with you. you are seeing the country move a bit to the left. as republicans, we look at the state of california. why do we have to leave 55 electoral votes up for grabs, or actually give up 55 electoral votes and not contest them at all. same thing with new york. that's a ton of electoral votes that wer n're not contesting ri now. what we needed to do as a party is concentrate on the economic and national security issues and move away from the social issues. >> penny, what we haven't done in this election is really square out what kind of america the population wants. in terms of -- at the moment, we're going for big government and small taxation and that doesn't work. how are we going to square it?

>> exactly. and that's where the balance needs to be. and i agree with boris this is where the president really is going to have to step forward and really put down the agenda. what it looks like, and really be the person that starts to negotiate in a much more up front or much more out-front area as far as on the fiscal path. you know, the senate that was just elected is probably more diverse. you actually have more conservatives and more liberals now in that moderate in the middle is somewhat lost. so it's going to be some interesting compromises that are going to have to be made in order for the president to get any type of bill through, so he is going to have to take a much more forceful lead. it is going to have to be direct negotiations with boehner, with the tune for harry reid and his caucus to get things true. i imagine you'll see some

triangulation. those that might be more liberal on the social programs. so it's going to be an interesting next 12 months. >> all right, penny, boris, thank you both. it's been a long night. we appreciate you both joining us early this morning. okay, let's take a look now at markets. as we mentioned earlier, we were seeing this knee-jerk positive reaction across the globe really, but we're starting to give some of that back. the dow isn't actually expected the open lower at this point. got to take fair value into account. we're looking at about 20 points for the open. similar for the nasdaq and s&p 500. 1426 is the level here. now, european markets give you a sense of what we're seeing overseas. the theme is pretty consistent. we're seeing gains in the range of about a third to half to in

some cases, at least last time we checked in on paris, 2/3 of a percent. those starting to recede a little bit. >> a couple factors. one, we got a result, and there's no legal issues. the other thing is clearly fed policy remains in play as it is. i think that's the kind of knee jerk reaction. >> so who needs to worry about greece? >> it's worth pointing that out, as we look at yields today, particularly in spain in just a moment. we've got this greek vote on austerity. really important tonight. nevertheless, take a look at yields on treasuries this morning. during the session, they are a little bit lower, as you can see, across the board. not as low as we were. the ten-year 168.24 is where we stand. commodities generally speaking, a mixed bag. the dollar index is weaker. the dollar is weaker across the board. but nymex down as well. more back on demand issues. they might have got a little bit

firmer if romney had won. it was thought he was taking a slightly more aggressive stance on the middle east. more diplomacy is what's in store as far as the middle east is concerned. gold is a little bit firmer. dollar is weaker. gold a little bit firmer at the moment as well. i think we've got a little shot of what's going on with the rest of the european bond markets. spanish yields and italian yields are both together as well. spanish yields, 5.65%. fairly noticeable, kelly. the messages congratulating president obama are coming in from across europe. david cameron has taken to twitter to message the u.s. leader saying he's looking forward to the next four years. and he'd like to push towards the u.s. eu trade deal. he was followed by angela merkel who said she appreciated their shared efforts towards resolving the current economic crisis. and french president francois

hollande and israeli prime minister benjamin netanyahu along with russian president putin who congratulated president obama via telegram. apparently you can still telegram people. i might have to try that just for the sake of it. >> how much is it a word these days? >> it's expensi expensive. >> still to come, phil lebeau will join us from chicago. look at the expectations for his second term. see you in a few moments.

president obama wins a second term and vows to tackle the key issues, the fiscal cliff at the top of that list. equities trading high on that news. gold also extending gains. but the prospect of gridlock in washington remains as democrats tame the senate and the republicans the house. now we know who is going to be president the next four years. the next question, who will be the next treasury secretary. timothy geithner has indicated he is ready to go. who do you think should take over the important job?

names have indicated jack lou and larry fink. if you want to join the conversation, please do so. e-mail us. you the tweet us or direct to kelly. that's going to be just another subject for debate. let's remind you, everybody, where we stand with the results at the moment. >> that's right. we'll get into the treasury secretary discussion in a little bit, too. stick around for that one. in the meantime, i just want to draw your attention to this little state right here. yes, ladies and gentlemen, it's ohio and it's blue this morning. one of the key reasons why this race has gone to president obama, you can see the delegate count, the latest from nbc. 206 for mitt romney to obama's 303. the one to watch all of this, our own phil lebeau is joining us from -- i'm sorry, phil, you're in chicago. what am i talking about? he's at president obama's

campaign headquarters in chicago. but, phil, ohio is one of the reasons why president obama was able to deliver that victory speech earlier today. >> absolutely, kelly. it's the midwest fire wall that we've heard so much about. the president was counting on victories in ohio, wisconsin, iowa. he got those. and in fact, when he declared victory just a few hours ago here at mccormick place in chicago, they had tallied up -- of the nine battleground states, the president took seven of those. one of those, north carolina, went to governor mitt romney. the other one, florida, is undecided at this point. they've stopped counting ballots down in dade county. during his speech, president obama said themes for his second term in office, starting with the fact that this country needs to come together. >> we have picked ourselves up, we have fought our way back, and we know in our hearts that for the united states of america, the best is yet to come.

>> president obama spent the night here in chicago. he goes back to the white house later this afternoon with his family. what's interesting, ross and kelly, is when we will hear from president obama in terms of perhaps setting out an agenda for the second term. now, towards the end of the campaign, he did put out what he called his agenda for re-election. but now it will be interesting to see if he actually sits down and says listen, here are the two or three primary goals that we're planning to conquer, at least initially in the second term. certainly along with the treasury secretary, that's what people will be focused on over the next consumer of months. >> phil, good to see you. thank you so much. it's amazing how quickly things change. >> i thought many people would linger a little bit, maybe try to get last drips of champagne available from the campaign. but they've moved on to the bars or something. >> getting ready for the day

ahead. >> european markets are trading at two-week highs on the back of obama's victory. after the break, we'll get a look at how america's major financial health care and energy stocks are reacting. don't go anywhere.

as we head towards the first trading day with president obama being re-elected in the united states, this is the reaction in europe. it's a mildly risk-on scene. stocks up here across the european equity landscape. as far as sectors are concerned, autos and health care are the best. just two sectors down. the dollar is off this morning, but it's a mixed performance as far as certain commodities are concerned. u.s. financial stocks. maintaining the status quo, so not a major reaction.

citigroup flat. goldman sachs up just a third. we're not going to get any major regulatory changes. as far as pharma stocks, we stay with obama medicare, so no major changes in care. european farmers a little bit firmer. energy stocks with energy play, seeing oil prices weaker this morning. the focus back on demand fundamentals and it just means with obama staying as president, probably takes a little bit of heat out of the geopolitical tension. as a result, chevron slightly firmer. the oil price is down, though. exxon down one and a quarter here. but essentially the tone this morning has been a mild risk on. relief that we've got a decisive result and, of course, it also means that fed policy stays in play for quite a bit longer. back to you. >> yeah, as some have argued,

the federal reserve remains the most important institution in washington. now joining us is the managing director of capital alpha partners for a little bit more about what to expect in markets here. we've now removed at least one source of uncertainty. does this mean markets can rally into year end? >> well, i think so. what we're seeing is an outcome that's largely in line with expectations and the status quo result. >> so with that status quo result, james, what happens in terms of pricing in the fiscal cliff and whether the president lays out immediately some kind of principle or challenge to the republican party or not? >> well, we have probably two or three difficult weeks ahead of us because the president does have a strong position as a re-elected president. the markets typically rally when a president is re-elected, so that gives him a certain amount of credibility. on the other hand, he didn't run

on a specific program of tax reform or a specific fiscal program either, so we'll be standing by waiting to see what the details of the president's plan are once he releases them over the next two or three weeks. once we see details from the president, we'll see the bargaining side of the process, and so during these two or three weeks going into thanksgiving, i think that the markets may have a certain amount of trepidation. will they do a deal or not. i'm highly confident that they will do a deal, and that the fiscal cliff will be a nonissue at the end of the day. but we do have to go through that bid ask process, which is going to be the next major focus in washington. >> james, research over here says whoever was going to be president, they reckon half the fiscal cliff would occur, which would be a tightening of 2% to 2.5% of gdp. if that were the case, how would investors react? >> i think that investors will take a wait and see attitude. at the moment, i just don't see that happening. i think that investors are

focused on the fundamentals of the u.s. economy and what it takes to keep the u.s. economy from sliding into recession. like wise, washington is very focused on that, too. so i think that the trend here, the expectation is that we'll postpone most of the major decisions until some sort of structured tax reform process next year. we'll make whatever down papal we need to make on the budget sequester in order to postpone that decision, too. the real question is really what you do with tax rates, particularly the upper income individual tax rates. so there's actually a relatively narrow spectrum of things that need to be agreed upon by the end of the year. so, you know -- >> does this spell death for divide dividend stocks then? >> i think that dividend stocks are in roughly good shape. the senate over the summer passed a marker bill on tax reform, which had a 20% dividend -- tax rate on dividends. what i think that does is give

investors some confidence that it's not going to triple. we're probably looking at a tax rate on the order of 20% plus the 3.8% for health care on top of that. that's a much more moderate outcome than a 44% tax rate. >> all right, james good to see you this morning. thanks for joining us. we appreciate it on this day after the election. the managing director at capital alpha partners. he seems pretty relaxed, sanguine about the fiscal cliff discussions. >> if you look at defense stocks, they've been rallying lately, which would point toward a resolution here, even as we don't see one materializing. some investors do. but we've got to go. >> we have. coming up, an hour early today, a special edition of "squawk box," live, of course, from across the nation as they also evaluate the presidential election. >> that's right. we'll see you back here tomorrow.